It was the second blow to the Government after another High Court decision ruled that plans for future development in two large areas of Northern Ireland were unlawful.

In the PPS 14 case, brought by Omagh District Council, Mr Justice Gillen ruled that the Department of Regional Development was acting beyond its legal powers in introducing and administering the policy.

He also criticised the “character” of PPS 14, but refrained from striking it out in a move which would have caused chaos in the Planning Service, and possibly the courts as disgruntled applicants sought legal remedies over past rulings.

Government sources played down the judgement, saying that while the DRD had been found to have been acting outside its remit, PPS 14 was still in place.

It is thought the Department of the Environment will now take over the administration of PPS 14 and any successor.

A Government insider did admit, however, that PPS 14 “was on its way out, even before this came to court” as a ministerial group had been examining alternatives to the policy.

Mr Justice Gillen has now asked both parties to come back next week and make their case for and against striking out PPS 14.

It is expected the Government will ask that he leave it in place until an alternative is available to prevent creating a legal vacuum.

DoE Minister Arlene Foster said that her understanding is that the judge has yet to decide whether or not to quash PPS 14.

Mrs Foster said that she will ensure that the two departments will liaise in respect of remedies.

However, she made it clear that until the issue of remedies has been determined the Planning Service will still take PPS 14 into account when it is deciding applications.

She also added that she is currently participating with other ministers in an Executive sub-committee which is looking at the whole policy of single dwellings in the countryside.

Environmental groups that originally welcomed PPS 14 said they were disappointed at the ruling, but the Ulster Farmers’ Union unequivocally welcomed the High Court decision.

UFU President Kenneth Sharkey said: “We are pleased that PPS 14 is to be removed.

“The onus is now on the Assembly to replace it as quickly as possible with a balanced rural planning policy, which will have the flexibility to allow development in rural areas in appropriate circumstances.”

He said: “We certainly do not support a planning free-for-all, but PPS 14 was fundamentally flawed and ill-conceived because it was effectively an outright ban on any new development in rural areas.

“This would, for example, have excluded young families from living and working in their rural communities and this would have been disastrous for the long term well being of these communities.”

A Department of Regional Development spokeswoman said: “We are studying the judgement and will consider our position in due course.